Mall deal gives big boost to cell-phone coupons

In this undated photo provided by Shopkick, Cyriac Roeding, co-founder and CEO of Shopkick, addresses Best Buy sales team and shoppers last week at one of Best Buy's stores in San Francisco. Best Buy is among the stores that will be rolling out Shopkick technology that rewards shoppers just for walking in the door. (AP Photo/Shopkick, David Paul Morris) ¶ PHOTO CREDIT: David Paul Morris
— AP

In this undated photo provided by Shopkick, Cyriac Roeding, co-founder and CEO of Shopkick, addresses Best Buy sales team and shoppers last week at one of Best Buy's stores in San Francisco. Best Buy is among the stores that will be rolling out Shopkick technology that rewards shoppers just for walking in the door. (AP Photo/Shopkick, David Paul Morris) ¶ PHOTO CREDIT: David Paul Morris
/ AP

NEW YORK 
The nation's biggest mall operator is teaming up with a Silicon Valley startup to reward smart-phone-equipped shoppers for walking into its shopping centers.

The partnership between Simon Property Group, which owns 370 shopping centers, and technology company Shopkick Inc. is a big step in realizing retailers' long-held dream of using cell phones to beam ads and coupons to people passing by.

Simon is launching the program by the end of the month in 25 malls in New York, Los Angeles, San Francisco and Chicago.

Separately, four retailers will start offering Shopkick offers at the same time at some stores, including Macy's Inc. and electronics chain Best Buy Inc. The other two are being kept under wraps.

The potential to expand the program and affect how and what shoppers will buy is huge, according to Mikael Thygesen, Simon's chief marketing officer. He is traveling around the country to recruit more retailers into the program.

Thygesen expects to roll the program out to 100 of Simon's 370 shopping centers over the next couple of months. He anticipates one-third of the centers' stores to sign up over the next year. Each center averages about 140 stores.

Shopkick's system doesn't use the Global Positioning System, or GPS, which is what phones usually use to determine their location. Instead, it relies on retailers installing small speakers at the entrance to their stores or the mall. The speakers emit an inaudible sound that can be picked up by cell phone microphones. The sound contains a code that identifies the store.

Customers have to pull out their phones and fire up the Shopkick application - available for iPhones and Android phones - to pick up the signal. The app figures out where they are, then credits their account with "Kickbucks," which can be redeemed for songs from Napster; Facebook credits, a currency that can be used to buy games; magazine subscriptions; and cash-back rewards at store partners.

Participating stores also will be sending their own offers, which could include sneak previews to a new fragrance launch or discounts on goods.

One step that may give privacy-conscious customers pause is that they have to give their cell-phone number to the cashier to redeem the rewards to identify their accounts.

"We view this as a win-win ... for retailers and for consumers," said Thygesen. Shopkick will drive shoppers not only to enter stores but also steer them to particular merchandise, he hopes.

Simon won't get access to the mall's traffic patterns but will be privy to figures on how many people used the Shopkick app when they're in the public areas, according to Les Morris, a spokesman at Simon.

Shopkick's transmitter system guarantees that customers are in the store, not nearby, because the sound doesn't travel far, said Cyriac Roeding, co-founder and CEO of Shopkick. That sets it apart from GPS-based systems like Foursquare, an app that encourages people to "check in" to stores and other locations to let friends know where they are and compete to accrue "points," which have no cash value. Retailers want more accuracy than that, Roeding said.